Etisalat’s Nigeria unit faces additional government fines

Etisalat Nigeria, an affiliate of the UAE's Etisalat, is facing being fined by Nigerian authorities for failing to meet minimum service standards, only seven months after the African state imposed a similar fine of over US$2m, it was reported at the weekend.

MTN Group, Nigeria’s largest operator, and Emirates Telecommunications Corp, also known as Etisalat, were each fined 360m naira (US$2.28m) in May, while Bharti Airtel must pay a 270m naira penalty and Globacom was fined 180m naira, Bloomberg reported this summer.

Nigerian Communications Technology Minister Omobola Johnson told Bloomberg at the weekend the operators face additional fines if service improvements are not met.

“Fining isn’t something we want to do every six months, so we’re working very closely with them,” Johnson was quoted as saying. “If they do not meet those quality of service indicators, they will get fined.”

Etisalat Nigeria said in May a lack of reliable electricity and sabotage were to blame for poor service after the regulator fined telecom firms for failing to meet quality targets.

"This year alone we are investing more than half a billion dollars in expansion of our network capabilities and capacity," chief executive Steven Evans said.

The company said capacity constraints alone where not to blame for poor service, citing roadworks, sabotage and a lack of electricity as industry challenges.

"Foremost among these is the absence of reliable power which necessitates that every one of our over 3,000 cell sites needs to be served by two generators which run 24 hours a day and need regular maintenance and provision of weekly supplies of diesel," it said.

UAE's Etisalat owns a 40 percent stake in Etisalat Nigeria, which launched services in 2008 and had 10.75 million mobile subscribers at the end of 2011, data from the regulator showed.

This gave it a mobile market share of 11.9 percent, behind MTN Nigeria's 46 percent and Globacom's 22 percent. Airtel, a subsidiary of India's Bharti Airtel, had a 19.9 percent share.

Etisalat's network covers 74 percent of Nigeria's population, according to its parent firm's 2011 annual report, up from 59 percent a year earlier.